With the advent of open and competitive energy markets, utilities, associations and retail consumers face a myriad of new purchase opportunities. Energy may now be bought and sold in a variety of markets at prices that are published on a daily basis. Transmission capacity is often available to any utility, marketer or customer at postage-stamp rates that are non-discriminatory. Industrial, commercial and residential customers will be able to shop for alternative power providers under customer choice initiatives and retail wheeling services that many jurisdictions support. Energy is quickly evolving towards deregulated, commodity status.

This evolution has resulted in shortened planning horizons for purchasers. It has also resulted in unbundling services that were formerly provided by the large utility seller. These include the scheduling of energy, the sale of surplus energy, purchase of transmission capacity, purchase of short-term economy energy to displace purchases, as well as the mitigation of price risk to the buyer. At EES Consulting, we have the expertise to provide these necessary services.

Load and Energy Price Forecasting
We define our clients' longer term purchase needs through load forecasting using statistical and econometric analysis of consumption patterns and energy efficiency measures. Shorter-term purchase needs are developed from review of historical demands, weather forecasts, spot market prices, and existing purchase contract prices and limits. We can plan a resource stack to meet these forecasted loads using the lowest cost combination of existing contract purchases, existing supply resources, and short term market purchases and sales.

RFP Issue and Proposal Evaluation
When new and longer-term purchases are necessary, we will draft and issue Requests for Proposals (RFP) to major utilities and power marketers. Over the past several years, we have issued RFPs and evaluated responses for energy purchases, power plants and fuel supplies on behalf of clients from as large as 500 MW and 40,000 MMBTU/day to as small as 1 MW. We routinely follow daily price information from electricity and gas markets nationwide. Our staff would handle all respondent questions and requests, thereby protecting your staff from distractions and exposure to confidential proposer information. Through extensive economic evaluation and interviews with proposers, we can recommend a short list of qualified candidates.

On the client's behalf, we can negotiate with potential energy suppliers and renegotiate with existing suppliers as necessary. We form a negotiating team including client personnel, experienced energy managers and analysts, and experienced attorneys from our network of energy industry law firms. We establish clear standards of performance along with a timetable to successfully close negotiations. We control the document drafting process to the client's benefit. We leverage the current competitive nature of the energy markets to the greatest extent possible to deliver low cost, reliable, and flexible energy supply agreements for the client's signature. Our services in this area are uniquely valuable, as we represent no brokers or marketers. Our only goal is to provide our clients with the best quality commodity at the lowest possible price. We will report necessary accounting summaries of purchased and sold power.

We will also audit power purchase invoices for accuracy relative to actual schedules, metering, and contract terms and conditions, including prices. We will pursue reconciliation with the buyer and/or seller on the client's behalf.

Futures and Options Trading
We can assist the clients in mitigating energy price volatility risk through the use of electricity futures and options trading. Through the use of a futures trading firm, our clients can purchase futures contracts to offset or hedge power prices for deliveries up to 18 months in advance. We can help our clients establish and train a futures trading group within their organization. We can also help establish clear approval limits and verification procedures for financial protection.

EES Consulting can develop internal risk management systems that keep track of futures, options, and other financial instrument positions. The tracking system would include the development of reports for upper management and accounting, showing daily profits and losses on hedges and pricing level risks.